Constitutional Law I
Dormant Commerce Clause II
Nov. 17, 2004
Intentional Discrimination
West Lynn Creamery v. Healy

(1994)
Retaliation anybody?
 Mass tax on fluid milk products (in- and out-state);
proceeds are distributed to in-state producers

Discriminatory?
 Tax is uniform, assessed on all producers, thus valid


In-state interests (w/ vote) protect against abuses
Virtual voice theory of representation
 State subsidies restricted to in-staters are also valid


Payment by state taxpayers creates political check
Combination
 lack of transparency and political oversight
 Purpose and effect is to change mix of IC in milk
Fall, 2004
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Unintentional Discrimination
Minn. v. Clover Leaf Creamery (1981)

Prohibition on plastic nonrecyclable containers
 Stated purpose: health & safety (solid waste mgmt)
 DC finds: economic protectionism

Discrimination against out-state commerce?
 Neutral:

Dairy industry; presumably can adjust easily
 Losers:

Plastics industry (slightly, only wrt nonrecyclable bottles)
 Winners:
DCC protects
I/S commerce
not industries
Fall, 2004


Cardboard industry; a major Minnesota product
But out-state pulpwood firms can pick up slack
Test: Does law necessarily cause a shift in
business
con Law
from
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out-state to in-state firms?
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Standard of Review
Dean Milk v. Madison

(1951)
City ordinance requires milk pasteurization within
5 miles of city and production within 25 miles
 Is the law discriminatory (intentional or unintentional)?

Discrimination against IC is protectionist unless
no non-discriminatory alternative is available to
achieve a legitimate local interest
 What legitimate local interest at stake?

Healthy milk, verified by inspection
 Does it require 5/25 mile restrictions?

Fall, 2004
Uniform inspection available
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Rule in DCC cases
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Standard of Review
Maine v. Taylor

(1986)
Maine prohibits import of live baitfish
 Discrimination against IC (intentional/unintentional)?

What standard of review?
 No non-discriminatory alternatives that adequately
protect legitimate local interests

Legitimate local interests
 Protection of fisheries industry

Non-discriminatory alternatives?
 Imported fish introduce parasites; non-native species
can upset delicate ecological balance
 Experts: no suitable inspection means
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Standard of Review
Maine v. Taylor

(1986)
How strict is “strict scrutiny”
 Who bears the burden of proof?
 What result when “substantial scientific uncertainty”


Can state guard against “imperfectly understood
environmental risks”?
Does Ct. adopt the precautionary principle?
 “If there is reason to doubt the safety of an action,
don’t do it. In the absence of scientific certainty, err
on the side of precaution”

Or the uncertainty principle?

Maine Fish Health Issues Website
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Extra-Territorial Effect
CTS Corp v. Dynamics Corp (1987)

Indiana anti-hostile takeover statute
 regulates tender offers for Indiana corporations
 most tender offers originate from out of Indiana
 does law regulate out-of-state commercial activity?
Rule: State laws cannot have direct extraterritorial effect (operate out-of-state)

Can’t regulate foreign economic activity
 Baldwin v. G. A. F. Seelig: New York law regulates
wholesale prices of milk purchased in-state. Ok
 Also prohibits retail sale of imported milk unless
wholesale price paid (out-of-state) is as high as NY
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Extra-Territorial Effect
Rule: State laws cannot have direct extraterritorial effect (operate out-of-state)

Can’t regulate foreign economic activity
 Edgar v. MITE Corp (1982): Illinois reviewed sale of
stock occurring out-of-state to see if met state stds.
 Brown-Forman v. NY (1986); Healy v. Beer (1989):
Most-favored-nation trading status: Could not sell instate for more than lowest price sold out-of-state.

Can regulate in-state economic activity, even w/
incidental impact out-of-state
 E.g. foreign goods sold in-state must meet standards
 Tender offers (wherever made) must meet standards
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Bringing it all Home
Pike v. Bruce Church (1970)

Arizona law requires Ariz. cantaloupes to be
packed in-state
Discriminatory?

Facial: Ariz. growers may need to build plants
 Only in-state firms burdened; not a DCC problem

Effect: enhance reputation of Ariz. growers
 Yes, but doesn’t affect mix of IC
Burdensome?


Yes, but all police power regs impose burden
Is the burden justified?
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Pike Test
Where the statute regulates
evenhandedly
to effectuate a legitimate local
public interest,
and its effects on interstate
commerce are only incidental,
it will be upheld unless the
burden imposed on such
commerce is clearly excessive
in relation to the putative local
benefits.”
Fall, 2004
con Law I - Manheim
discrimination
against IC
exercise of police not
commerce power
direct vs. indirect
effect
balancing of interests
- even indirect effects
can be too great
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Pike Test
Where the statute regulates
evenhandedly
to effectuate
legitimate local
are these aquestions
judicial
or legislative
public
interest,
in character?
and its effects on interstate
commerce are only incidental,
it will be upheld unless the
burden imposed on such
commerce is clearly excessive
in relation to the putative local
benefits.”
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If a legitimate
local purpose is
found, then the
question becomes
one of degree …
can the local
interst be
promoted as well
with a lesser
impact on IC?
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